Farmers have always “hedged” to protect themselves against fluctuating prices. It means agreeing to sell a crop to a trader in advance for a fixed price, allowing the farmer to guarantee his income for the following year.

If prices go up in the meantime, the trader does well out of the deal, if they fall, then the farmer has got a better price than if he had waited.

The system worked well, until banks and investors argued for strict regulations to be lifted. By the mid-90s, millions of tonnes of produce were being bought and sold by traders who had never so much as picked a coffee bean.

The numbers involved are truly staggering. It is estimated that 80% of trading in some foods is now purely speculative.

Last July Anthony “Choc Finger” Ward snapped up 240,100 tonnes of cocoa beans in a £658million deal.

His Armajaro commodities fund took control of 7% of the world’s annual production in a daring bet that cocoa prices would continue to soar.

The deal helped push chocolate prices to their highest level for 33 years, and at the same time speculators forced the price of coffee up by 20% in just three days.

While we cannot blame traders for every extra penny on your grocery bill, experts say that their greed is a growing problem.

Even the boss of Unilever has blamed cavalier traders for higher grocery bills.

Paul Polman, whose company owns household names from Knorr to PG tips, says: “Food inflation has attracted speculators for short-term profit at the expense of people living a dignified life.”

The speculators exploit factors such as regime change in West Africa, drought in China and riots in Egypt which have all pushed up prices.

Wheat prices shot up by 80% as the worst drought in China for two centuries threatened a grain-growing region the size of Denmark.

Add to that floods in Australia ruining wheat crops, failed harvests in Canada and Russia plus a Russian ban on wheat exports until summer and it leads to dearer bread in the shops in Britain.

In the last year, a loaf of Warburtons has risen by 5% from £1.29 to £1.35 and The Grocer’s food expert Alex Beckett says: “Disastrous harvests around the world have pushed up prices and there won’t be much let-up until the summer at least.”

Chocolate companies like Mars and Kraft-owned Cadbury and Toblerone have cut the size of their bars but kept the price steady as the cost of cocoa jumped 7% because of political upheaval on the Ivory Coast.

DEMAND

Other, more unexpected factors, also have an impact. The Chinese are eating more meat and dairy products and abandoning vegetarian dishes as they leave the country for the city.

Migrant worker Han Xiaotao, 29, and his wife Cui Xiaona, 28, recently left a small town in Hebei province to run a stall in Beijing.

Han told researchers from the UK’s Global Food and Farming Futures report: “Life in the countryside is much simpler. There we ate food like noodles, cucumber, tomatoes, potatoes, cabbage and green onions.

“In the countryside, it is too difficult to buy meat. But here it is easy.”

In the past year, massive demand and worldwide shortages have also seen the cost of corn leap 92%, coffee is up 82%, sugar 36% and vegetable oil 20% while beef prices have jumped by 23% and pork by 26%.

It means the cost of a packet of Kellogg’s Crunchy Nut Cornflakes has risen 44p in a year to £2.74 while a jar of Nescafe Gold Blend coffee granules is 9p dearer at £2.87.

The Egyptian crisis sent the price of oil to a two-year high with Brent crude topping $100 a barrel. This in turn forced the price of a litre of unleaded up to a record 128.71p and diesel 133.65p, driving up transport costs.

While fears that the Suez Canal, used to ship four million barrels of oil a day, could be closed were very real, the AA warned greedy traders were more likely to push up prices than tensions in the country.

A spokesman said: “The boys on the stock market are more of a danger as they are capable of inflating prices on fears alone.”

So while commodity prices will remain volatile because of extreme weather or civil unrest which is out of our hands, it seems the money-grabbing City slickers have found another gravy train to jump on.